Employment Traits of Gen Z, 'Juicy' Bond Yields, Americans Quit Bowling

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0:12 This is the Bloomberg Money Podcast. I'm Tom Keen with Scarlett Fu. Join us each week for a smart look at the forces shaping your financial life on personal finance, on retirement, and wealth management. We will explore how people are earning, investing, and building wealth. We are live Fridays at noon Eastern on Bloomberg Television. Subscribe to the podcast wherever you listen. And as always, on the Bloomberg Terminal and the Bloomberg Business app.

0:42 We're still there with us today.

0:43 David Gurr is with us this morning here for Bloomberg this weekend and into the political maelstrom that he's in as well. Nikki Waller's here on a wide set of topics, which I think is going to be great. And personal finance is sort of shattered within these markets.

1:00 Sure is.

1:01 Good thing we're all in it for the long term.

1:03 Romain Bostic with us with some real expertise. What's different here, folks, is we all follow the blur. Scarlett and I do that, but then Romain's really channeled it, and we're going to talk about his perspective on running shoes.

1:14 Well, he talks to a lot of CEOs, and he's got good insight into how some of these consumer-facing companies are managing through this period.

1:20 Romain Bostic on a first-word basis is with Jalen Brunson about which shoe he's going to wear next year for Ford Gazillion.

1:26 I call him Jay.

1:27 That's good.

1:28 Great, let's get this started. David Gurra, we're into the election season. You got Raoul Braunstein on here, Bloomberg this weekend. What's your first question, Raoul, about the cacophony we're living?

1:38 Why is the president going to Texas and Oklahoma and Alabama? Why is the vice president going to Florida? What does it say about their strategy, Republican strategy going forward? We were promised by the president a few months ago.

1:48 Right.

1:48 Everything's up for grabs. He's going to crisscross the nation. He is sticking firmly to these red states.

1:52 The personal finance of 50 states is flat on their back. I did Duluth, Minnesota today. Forget about that. Why aren't they in Iowa where the affordability issue, Grassley, at what, 90 years old? Is that perplexing about this?

2:05 Yes, in his 90s. Look, I think in states where now we're seeing races incredibly close, you have candidates who might not feel so easy with the president going there because of what's been happening in the economy more broadly, and I was struck by what Tom Tillis of North Carolina, my home state, said he, of course, retiring from the Senate.

2:21 This is a time when these lawmakers who are up for reelection are focusing on their own states. They don't want to have the burden of the president of these districts.

2:28 Is this where he mentions Duke is 4-0?

2:30 Yeah, I think it is.

2:33 I will not talk about UNC football on principle on the show.

2:36 Let's talk about the economy, though, because, Romain, we got some jobs numbers today. We also got consumer confidence this week that shows people feel really lousy, even though there is job growth. And we had solid PMI numbers which show that the economy's doing well. It's kind of hard to get a handle of where things are.

2:51 It's hard to get a handle. I think someone said it best to me.

2:53 They said right now you have a consumer that is behaving a lot better.

2:57 Than what he or she actually feels.

3:00 And I guess that's good in the short term, but long term it raises a lot of questions about Are we reaching a breaking point?

3:05 And to your point, David, about the midterm elections.

3:07 This is something that has come up time and time again on the campaign trail. It doesn't seem like a lot of people in Washington are paying a lot of attention to it. But I can tell you this right now, a lot of the retailers and the apparel makers and the companies that are selling goods and services, they are paying attention to it.

3:22 That's all you hear on the conference calls these days.

3:24 And Nikki, you see that too with companies like Dave & Buster's and Lucky Strike. They're hitting some serious economic headwinds.

3:30 Yeah, we're seeing real consumer fatigue. And we know when people's finances are stressed, the first thing to go.

3:36 Is that they're going to chop out is.

3:37 That discretionary spending and a fun night out. The other thing that's happening is that places like Lucky Strike and Dave & Buster's aren't cheap anymore. You're looking at a couple hundred bucks for a night out. When I think all of us can remember the bowling alley beat you, you can have a good time for 20 bucks.

3:55 You can have a good time for 20 bucks. One go with that.

3:57 Absolutely.

3:59 Between wages, between insurance costs, that's gone way up. So, Romain, you have talked to the CEO of Nike a couple of times. They have their own issues, right? They have their own execution issues. Elliot Hill inherited a bunch of problems, but they kind of really show some of the challenges that these consumer-dependent, consumer-facing companies face. are encountering.

4:18 Yeah, and it's kind of one of the more ultimate discretionary names out there, and they've been struggling. A lot of idiosyncratic issues, but there are some broader macro issues there, too. You know, I was looking at a lot of the anecdotal Fed data about where spending is. You're still seeing spending strong at value places, the big box stores, the Costcos of the world. Durable goods is just really just kind of starting the circle to drain. But at the bottom of that stack was actually apparel and footwear. And it had done better at the start of the year, but you're starting to see a pullback. People are only buying the things either that they absolutely need or things that are really unique and exciting.

4:48 And there's not a whole lot in between.

4:49 I'm looking this weekend. I mean, Mrs.

4:51 Keene told me she's got the Jalen Brunson Nikes, you know, the custom-made ones. I don't even know what they cost. You don't want to know what they cost. The Nikes are like in, in, in right now. I mean, does the name still matter to Nike, like the endorsements?

5:04 Oh, yeah, it matters.

5:05 Just yesterday when they released their earnings report, they also released the Caitlyn Clark connection. This is a huge deal, the most money that they've backed for a woman athlete ever. And, in fact, the amount of money they're spending on this rivals what they would spend on some of their male athletes.

5:19 They really see her.

5:20 As sort of being the potential focal point for the branding, the endorsement branding.

5:24 And why is the stock cratered?

5:26 Well, because they're not selling. Jordan is down. Sportswear is down.

5:30 The only real bright spots, they had some sort of, and the Nike brand here in North America.

5:34 China is just abysmal.

5:35 That was down 22% in the most recent quarter. They're not selling anything over in Europe right now. This is a story right now where people have options. And for a lot of people, those options are not Nike.

5:46 People have options. People are being selective with their spending. But David, if you listen to the president, there is no affordability crisis. There is no affordability challenge. As far as he's concerned, he fixed whatever inflation problems existed.

5:57 I just want to say, in the Gurra household, we bought some Sabrina Ionescu, sort of in our part to help Nike's bottom line.

6:03 But no, I think that's right.

6:04 And so what we have from the president is this promise of this $ 5, 000 dividend, this promise that, you know, come election day, the war is going to end, oil prices are going to come down. And I think there's frustration among the American people with having to hold on to that as the best hope here that the president is offering. And I think there's just this talk about sentiment, a real disconnect. That was something, that $ 5, 000 check was kind of a throwaway line at this Republican convention in Dallas.

6:27 It continues to have life.

6:28 And I think lawmakers are having to deal with how do they answer their constituents who now expect this sort of thing.

6:33 At the same time, this has been a little bit of a Republican talking point. It has a lot of truth. Americans are fairly rich. One of the things we're looking at in money is that later this year, the Fed is going to release its survey of household consumer finances. And we are going to see how it is that people are managing to shop and spend, even with everything they're facing. And I think we can't avoid the fact that people have retirement accounts. People have homes by and large.

6:59 They are in a pretty good situation with their mortgages. It's what feels bad is sometimes the discretionary stuff.

7:05 No, and on top of that, you have AI kind of looming over everyone. I know that your team wrote something up about how there's a new report that shows AI may force 11 million workers into new jobs.

7:15 It's a really big number from McKinsey and shows sort of the extent of what we could be looking at in the next couple years. And how our jobs are going to change, we don't know. It's a really, you know, I think that's one of the things that's helping people feel not so great is that, you know, tell anyone there's big change coming, but we can't tell you how, but it's going to be kind of painful. And that adds up to some really dark consumer sentiment like we saw earlier this week.

7:40 David mentioned the Carolinas. and for his birthday. What we need to understand is this is like his.

7:48 Second job.

7:49 His real job is nailing a major pentatonic scale and the mixolydian scale with incredible ability here. David Gurra playing fiddle a few weeks back.

8:05 This is very much back, years back.

8:11 Thank you.

8:22 I wasn't sure which video we had. That was a celebration during COVID.

8:25 Well, yeah.

8:26 Those are some skills. Thank you so much.

8:32 During COVID as well, to see that. It was a birthday time.

8:35 Well, happy birthday, David Gurra.

8:36 Thank you very much.

8:37 Appreciate it. We'll maybe get you to do this live one.

8:40 Day for us.

8:40 Yeah, I'd love to. Tom can bring his guitar, mandolin. We'll do the full, hit the band together.

8:43 Wonderful.

8:44 What's your instrument, Nikki?

8:45 Triangle.

8:46 I'll bring the cowbell all right thank you so much to all of our guests today nikki waller david gora and romaine bostick.

8:54 Tom well i mean you know there we are coming up we've got you know a really important discussion this is suzy welch hugely anticipated my essay of the year last year she's at nyu and this will get some heat going in the room this this is a.

9:10 Controversial moment with Susie Welch.

9:13 She's got some strong opinions. All right, we're going to look into all that, including her research on decision-making and how it applies to your money moves. This is Bloomberg Money.

9:26 Bloomberg Money, it's on personal finance, it's on wealth management, it's on retirement.

9:31 Scarlett Fu and Tommy, what a day.

9:33 The jobs report and then we had like, you know, British hydro, European hydrocarbons.

9:38 And all that.

9:38 You also have the French bond crisis for anyone who's paying attention to what's going on in Europe.

9:42 It's like serious stuff.

9:43 Yeah, absolutely.

9:45 We welcome all of you.

9:45 We're a little bit off topic on that and way off topic here with someone who's beyond important. Joining us now, Susie Welch, NYU Stern School business professor, which barely describes her impact.

9:58 The book is 10, 10, 10.

9:59 A life transforming idea. We'll talk about their path to academics and all that. I can give you the exact date here, folks. September 24, 2025, I said, yeah, Susie Welch said, is Gen Z unemployable? And it's just real simple. It was a blistering essay in the Wall Street Journal.

10:20 About the kids. What how damaged are the kids out of let's do this?

10:25 This is the morning must read here the the money must read I should say this is from the essay and it's just simple The message is often met with a pushback that business needs to change What has the focus on achievement gotten us but anxiety? Oh woe is me and who wants a life of scope with action and and a decent paycheck when the world is already unstable?

10:47 How damaged were the kids out of COVID?

10:50 I don't know if I'd use the word damaged. I have to say, you know, I love Gen Z. I think that they were changed. I mean, maybe they were changed even before Gen Z, but what the pandemic reinforced for them is that they did not want to postpone joy. They did not want to earn their happiness, which is actually a very ancient concept. If you go all the way back to the Stoics, the idea is that you work very hard and then you earn your gold watch and your relaxation and your retirement, basically, that you play, you work very hard, then you get to play hard.

11:19 And I think what happened and what the research would show is that they came out of the pandemic and they said, we don't really like that arrangement. We would like not to postpone joy. And look, maybe their reasons are the bottom can fall out at any time. Maybe there's no joy at the end of the working.

11:31 So why would we sign.

11:32 Up for that? steam coming out of my ears.

11:35 Scorching yeah a little bit it feels like they're they've subscribed to YOLO in like a very very extreme way yes what do old people like Tom like me get wrong well what do we get wrong about the skills that you need and how to build a career today for this cohort of Gen Zers who don't want to delay joy who you know want to live life I think that People from older generations have the former kind of array of values, which is they value achievement more, and they have also this equation in their heads that you have to work to get your period of pleasure.

12:10 You know, I want to say maybe they're right, okay? I mean, I don't ascribe to it. I work all the time, and I love working, and I've always loved, but I would say that what If you are managing Gen Z, and you cannot put your finger on why they are driving you crazy, but there are words for it, and that is that their values are very different than yours, and either, depending on how much power you have, how much hiring power you have, you can decide whether or not you want the Gen Z with that attitude, or you can go get the Gen Z with you.

12:38 But are there two groups?

12:39 Because I got Eli on Bloomberg Money, who works nothing under a 60-hour work week, maybe even seven, He knows the King's English. He can do math. To me, there's two parts of Gen Z. There's a Gen Z that you and Mr. Welch, Jack Welch knew, and Scarlett grew up with, and I grew up with. And then there's this cohort you're talking about.

12:59 Okay, so not everyone in Gen Z is the same. But if you actually look at the numbers, 2% of Gen Z have the values that we would typically ascribe to.

13:08 Two?

13:09 2%.

13:09 So, yeah, they exist.

13:11 And you know what happens is there's a cage match of organizations and individuals who are trying to hire that 2%. And the rest have a different set of values. Their top value is self-care and well-being. Their second value is agency, which is like wanting to make all the decisions. They are very, very self-deterministic. And then they would like voice as their third value, which is authentic self-expression.

13:31 How do you say this with a straight face?

13:34 So my question here, sorry to interrupt, but my question is how much of the responsibility lies with schools? I mean, you have to have the knowledge, the skill set base in order to kind of move forward with these kinds of demands. universities and professors don't appear to be equipping these young people with the right skill set. Their values are formed by the time they get to school, okay?

13:54 I mean, I don't think the professors all feel the same way about this. I don't think this is happening in.

13:58 School, okay?

13:59 Schools have learned to cater to it because they're getting in students who have a certain set of values. But those students didn't arrive with totally different values and then have them change. I think it's happening a little earlier than that. And I want to just say, I have one little piece of data which I think you're going to be delighted in because I've just gotten this data recently.

14:16 We went in at Becoming Labs, which is the lab that I work in, and we gave our test, the values bridge, to 300, the top 300 executives at a large bank that shall remain nameless, except for to say it is a wildly successful, extremely large bank based in New York. So we gave the values bridge test to their top 300 executives.

14:39 Why?

14:39 Because the CEO asked me to.

14:41 And we looked at their values.

14:42 There was 91% value overlap with this group.

14:46 That's unbelievable.

14:47 91% of them had the exact same values.

14:50 Their top values were wildly.

14:53 Different than the Gen Z people that they were managing. But what was fascinating is They didn't have Gen Z's top values, agency and voice, self-determination, self-expression. Those were down at number 14 and 15 for them.

15:05 So they had risen up to the top.

15:06 So we've got this very successful cohort of banking executives, and they are managing people with radically different values.

15:13 This is what's causing the tension. We wanted to ask you about the worst career advice you ever got. Not the best, but the worst. And I know that something that drives you absolutely bananas is something that Steve Jobs used to tell everyone, which is follow your passion.

15:26 Yeah.

15:28 Hold it on here. Look, I think maybe you should, but maybe you shouldn't. Because passion, which is often really your interest, it's just one part.

15:36 It's sort of a three-legged stool when you're going to try to build a career that's sustainable. And what you're interested in, your passion, is one leg of the stool. But you also have a set of values. Everyone has a set of values. But also you have aptitudes. fine, follow your passion if you're good at it. You know, like I, you know, I would be up there like with Beyonce if I was just following my passions, I would like to perform, but I'm terrible. I mean, terrible at it. So, I mean, I think that what students want is like this wonderful answer. And I understand why people give this advice because if you're, you know, technically, first of all, it feels very good to say, just follow your passion. And everybody goes, yeah, I should just

16:08 follow my passion. I would also say another piece of it is sometimes people don't know what their passions are. I mean, we've got kind of a generational cohort who will say with dead seriousness, like, some days I want to be a veterinarian.

16:18 That's what I hear all the time.

16:19 But then in the afternoon, I want to start a tech company based on AI.

16:22 And it's like, well, you've got to choose between those, I'm afraid.

16:25 Susie, I'm going to dovetail this all together with your acclaim at NY.

16:29 You had a father-in-law.

16:32 Who, his voice, you have a voice when you're a Boston and Maine railroad conductor. So Jack Welch's father was a conductor on a train a million years ago. That heritage wasn't about a voice. It wasn't about all the stuff you've brilliantly studied Here, what did you learn from Jack Welch about grinding through the investment day of retirement?

16:55 I have to say, I've often thought about what Jack's values, if we'd had the values bridge, I would have loved to know what his values were. But Jack actually believed in enjoying your work. I mean, and I don't want people to take out what they find to be an enjoyable thing.

17:07 But Jack believed in hard work.

17:08 I mean, he was one of these people who was like very driven to you know, we left our honeymoon early because we missed work so much. I mean, that was our shared personality type. And so I think that he believed in work and the term fun employment probably would have driven him just about as crazy as it drives me when my students say they're going to have some fun employment, which is purposely not work to have fun.

17:30 And I'm like, but work is fun. So I think that he would have some thoughts. So his aptitude was work, hard work. His value was work. He certainly had the value of work centrism. His aptitudes were too many to list.

17:42 All right. Susie, thank you so much for joining us. Susie Walsh, we were just getting started here with NYU Stern School of Business, author of many books, but really thought leadership here when it comes to career management and also decision making and everything that entails.

17:56 All right.

17:57 Coming up, we've got a conversation with Torsten Slocke, chief economist at Apollo. Of course, we're going to focus on personal finance, retirement, and wealth management. This is Bloomberg Money. Okay, you need to tell me about this study.

18:10 So we have a methodology. It's a methodology that I teach at NYU.

18:21 Let's bring in Torsten Slocke right now. He is chief economist at Apollo.

18:24 Torsten Slack with us, and we are thrilled he's with us with an eclectic vision from Deutsche Bank over to Apollo. And I've got to say, Torsten, I look at this, and the thing at the end of the weekend, in terms of personal finance, retirement, and wealth management, is we have a top-line boom economy GDP like we've never had.

18:46 Discuss it. It's like after Napoleon's war. It's after 1947, World War II. This boom nominal GDP is extraordinary.

18:54 Yeah, because we have very, very strong tailwinds to growth coming from the AI spending boom. We also have tailwinds coming from the one big bit of a bill. And we also have some tailwinds coming from the home showing of production. The manufacturing sector is actually doing really well. And what's most noteworthy is also that the weekly data for business formation is telling you that the number of new businesses that are created every week is at the highest level ever, ever in U.S.

19:15 History.

19:16 We've never had just a dynamic economy as we're having at the moment because people can use AI to start a new business.

19:21 So, Torsten, bring this over to the retirement plans where everybody's in four index funds trying to get it done. If we have a roaring economy, as Edgar Denny talks about, are we at risk with our retirement?

19:34 Well, this is what's really important about this discussion is something you and I have talked about for years because now we have a huge capital need for financing AI.

19:41 And in the meantime, we also have.

19:43 A huge capital need also for financing the government. So, we went from a savings glut from 2010 to 2020 where there was a significant amount of savings from China, from savers, from people who have a 401k. But today, there are so many things to invest in. You can decide to invest in high government bond rates. You could also decide to invest in AI. The number of projects that need capital is very significant. And that's the reason why interest rates keep going up. because there's just a shortage of capital relative to the savings glut that we had for many years before the pandemic.

20:14 Let me go back to the economy, because as strong as the numbers indicate, it doesn't feel like it for a lot of people. The consumer-facing part of the economy feels like it's a completely different story than what's going on in AI and all the CapEx and all the buildup of the AI infrastructure.

20:29 Absolutely, and that's because the economy is bifurcated into the very strong AI spending boom, and on the other side, you have the interest rate sensitive parts of the economy, namely housing and autos. And housing, mortgage rates during the pandemic were 2.7, now mortgage rates are 7.2. In other words, it's become unaffordable to buy a house, and if you add that to affordability issues with healthcare, with education, oil prices, that's why consumer confidence continues.

20:53 To do so poorly.

20:54 The person within wealth management, within just basic wealth management, Project out one year, three years, five years out of how we bring down this odd boom economy.

21:07 Where will the damage be?

21:08 That's what Bloomberg Money people want to know.

21:10 Absolutely.

21:11 And the key conclusion is that interest rates are going to stay higher for longer because inflation is higher for longer.

21:16 And from a 60-40.

21:17 Portfolio perspective, that means that we now suddenly need to think more about fixed income. because the yield you can get in fixed income is actually really, really juicy if you go back and look at history. And if that's juicy, that means that both in rates but also in high-quality credit, you could get some very high levels of yields that you have not been able to get literally for decades.

21:34 Scarlett, juicy is CFA level four.

21:38 Yeah, it's a very technical term. I mean, you don't even have to go into fixed income. You could just keep money in cash and do pretty well, given where deposit rates are. And this is something that you have written about, this idea that people who keep their money in cash With the use of AI, that becomes a whole different picture here because AI can really change behavior in a way that the industry, the financial industry, is not quite prepared for.

22:03 Yeah, because we've had a lot of conversations in the last few weeks about Muse and what will Muse do to.

22:08 The Meta app, right?

22:09 The Meta app, your personal assistant that suddenly can make your life easier in a number of different ways. And one worry, of course, you can have is that if that makes your life easier by swiping out cash that you have in your checking account where interest rates are 0.01, if you can swipe that into another account while I walk into Whole Foods, suddenly my money go into my account.

22:26 When I walk out, the money goes out.

22:28 Okay, wise guy, would you do that?

22:29 So, well, the question is, this is why we are about to figure out how many people are giving their data to Muse and to the personal assistant.

22:35 You've got to be kidding me. I think it's Kara Swisher said it. You've got to be kidding me.

22:38 You're going to give Zuckerberg and that crew your personal financial data?

22:43 It's already possible today in many different ways to take your money in and out of your checking account.

22:47 There are some issues. Sometimes it takes a day. Sometimes it takes a little bit less time.

22:51 But the issue is, at the end of the day, that if you can swipe your money out of the checking account, you can have a checking account elsewhere where, of course, you also get a higher yield.

22:58 So, I do think that this is the way we're moving.

22:59 That may not be happening with Muse and the personal assistants from AI, but it's certainly that way that things are moving. Also, of course, with blockchain technology, making these things also a lot easier.

23:08 We love to mention blockchain and Bloomberg money.

23:10 I think we can. Yeah. Yeah, for sure. Well, AI has made it so that price shopping, rate shopping, and switching is now frictionless. And that means that I feel like that's going to introduce a lot more volatility. The number that you see today may not last for very long.

23:24 Well, that's true.

23:25 And that's also why, of course, the risk ultimately becomes if money moves around much quicker and if suddenly subscriptions are canceled and subscribed to much quicker, of course, you could have a more volatile economy. So that's why AI, once again, can be disruptive. And it can be disruptive, of course, in the normal consumer economy, but it can also be disruptive, of course, in personal finances.

23:42 Right.

23:42 I got to ask this, and this comes right over to wealth management, to retirement, to psychology of what we're doing on Bloomberg Money.

23:49 You are expert on the continent of Europe.

23:52 Is the continent of Europe, the United Kingdom, well, less the United Kingdom, but are they going to become more Anglo-american in their capitalism. We're all praying for them to take more risk to me more equity based Do you buy it?

24:06 I over time this will come because the Europeans understand this they know that they need more capital to take risk if they need growth They will absolutely have to grow their economies and have more developed financial markets Think about it if you and I sit in Germany or Denmark or France and we have a good idea You will need to then go into your bank and say can I borrow some money? And if that says no You really have no other places to go. So when financial markets in the U.S., you can go to venture capital, private credit, private equity. You can go to another bank.

24:33 There are different places you can go and have this discussion.

24:36 Can I borrow from this great idea?

24:37 I'm going to get one more in.

24:38 Because Scarlett's got smarter questions. You know I bought the Austrian 100-year paper.

24:44 Oh, I'm sorry to hear that.

24:46 I was a yield hog, folks. Just so you know, I really screwed up on this. And Torsten said, don't do it.

24:52 I bought the 100-year paper, and it's down like 80%. You're laughing at me. At least I didn't buy it leveraged. That was cash we did that with. Tell me about yield hog right now, given these bond gyrations within our retirement fund.

25:07 What's most important about your 100-year bond is that you bought duration. And that tells you that bonds can actually also be very risky. We're figuring that out that anyone who has public U.S. treasuries and public credit are also very duration sensitive. So that's, of course, why being short of duration.

25:21 Is a good idea at the moment.

25:22 And what's particularly also a good idea is to be up in quality, first lien, see a secure top of the capital structure, but make sure that you are in short of duration debt so that you're not exposed to those duration moves that you unfortunately were exposed to when you bought.

25:34 A 100-year bond.

25:34 That's brutal.

25:35 If you're early on in your retirement planning, you've got decades left to work and you want to put money away. Yes, you put it in equities, but we keep hearing about alternatives, private equity, private credit. The idea that this is still a good place to go when interest rates are rising confuses me because private equity and private credit got their heyday because rates were so low. Now that rates are higher, how is this still a good time?

25:58 As long as you make sure that you're up in high quality private credit, high quality private equity. I mean, you get private credit as investment grade. That is as good as investment grade from the U.S.

26:06 Government.

26:06 Meaning the rating may not be exactly the same, but investment grade is very high quality. And that exactly is the whole point, that when something is investment grade, it's able to pay the higher debt servicing costs that come along when interest rates are higher. So make sure that your investing companies, I know it sounds trivial, investing companies that have earnings, investing companies that actually make money and therefore able.

26:24 To pay the higher interest rates that we're facing.

26:26 At the moment.

26:28 Lots of things were rated investment grade in the last go-around in 2007, and it turned out they weren't.

26:33 Of course, that's true.

26:34 But I mean today, I mean a lot of things are investment graded by several rating agencies. Of course, investors need to think about what type of, and think about the broad spectrum of risk that investors, you can take venture capital where you literally have no earnings the next five years. That's a different type of risk relative to investing in private credit that has the property of having earnings and therefore the ability to pay the high debt.

26:55 I got one final idea here. Are you read in on the New York Yankees?

26:59 You're Apollo.

27:00 Took a minority interest in the New York Yankees.

27:02 Absolutely.

27:03 Are you steeled for Tampa Bay and New York?

27:06 We're so ready. Absolutely. I have the hat.

27:08 I'm going to wear it. And I'm going.

27:10 It will be fun.

27:12 That was compliance approved.

27:13 Did you see the Yankees beat the Red Sox? Were you part of that?

27:16 I was personally not part of that. But I do read it, and we're very excited about it. We're so proud of this.

27:21 All right, Torsten, thank you so much. Torsten Slock is chief economist over at Apollo. Really appreciate it.

27:26 Thank you.

27:27 Coming up on Bloomberg Money, for millions of Americans, rising expenses are just another pressure point on top of their student loans. And guess what? Those loans, the payments are getting bigger. We'll explain why. This is Bloomberg Money.

27:39 Can you see over at Apollo like he has to know what.

27:41 The info is?

27:53 Bloomberg Money is your new destination for personal finance. It's a cross-platform effort that extends beyond your television screen, including our new digital hub at Bloomberg.com slash money. And Tom, this week, a story that feels extremely relevant right now is about soaring student loan bills and affordability because everything is more expensive. But now there's been this reorganization, restructuring, overhaul of student loans that's left people with student loan debt paying even bigger payments.

28:22 I'm glad you chose to do this. I'm conflicted.

28:24 Let's bring in one of the authors of this story, Bloomberg Money reporter Sarah Foster. So, Sarah, what happened here? This has to do with Joe Biden and what he did for student loans and now what President Trump is doing when it comes to student loans, right?

28:35 A lot of American student loan borrowers are really kind of caught in the crosshairs of these shifting federal student loan repayment plans. We spoke with my colleagues, Liam Knox and Janelle Marte. We kind of profiled student loan borrowers across the country, asking them what payment plans they're picking, how their bills are changing, how it's impacting their finances.

28:54 And many of the borrowers that we spoke with told us that their payments have, in some cases, doubled.

28:59 So that's because they're choosing bigger payments as opposed to extending their loans for longer, right?

29:04 There's two new repayment plan options, and a lot of them either come with longer repayment windows or they come with higher bills that can accelerate those repayments. And so it's resulting in a lot of these Americans who took on student loan debt kind of choosing between paying off their student loan bill or saving for retirement, saving for other long-term goals. And a lot of the borrowers that we spoke with mentioned to us that they're kind of having to sacrifice their future.

29:30 In your research on this, is there any understanding that for decades people paid their student loans?

29:37 I spoke with one borrower who has continued to make payments. for almost 20 years, and he switched to multiple different repayment plans. He's gone back and forth on forbearance periods while he's gone to graduate school, and it's ultimately resulted in the interest of being even higher than the principal balance that he took out.

29:55 The amount that people are borrowing now is vastly different than what they were borrowing 20, 30, 40 years ago.

29:59 I totally agree with that.

30:01 So I don't know that it's a fair comparison.

30:03 I agree.

30:04 I mean, the outstanding student loan out there is massive compared with credit card loans or auto loans. Talk a little bit about the makeup there. Yeah, we also looked at.

30:14 Kind of the composition of debt that a lot of households have, and it's still the case that, you know, this housing debt makes up the biggest share. But when you compare auto loans and student loan debt, you know, those are roughly identical, and it's really kind of the increase that we've seen in student loan debt since the early 2000s that's been a major kind of hurdle for us.

30:33 I've got to do this on personal finance. The chart earlier in the week was a shock, and it was so important, folks. We're going to give it to you again, and of course... Sarah's living this as we look at the 30-year mortgage rate.

30:43 Who knows where.

30:44 It'll be Monday? Who knows where it'll be a month from now? But the trajectory is really, really shocking. The long-term trend of the free lunch, Scarlett expanded out to 8,000 square feet right in the bottom there in 2022. And up, up we go from 3% to 7%. Sarah, this is a profound impact, even for people who aren't looking for a 30-year mortgage.

31:08 I go back to the beginning of the year, and I think about what I was hearing from a lot of the economists who I was speaking with, and the hope was that 2026 would really be better for us. We even briefly saw mortgage rates tip below 6%. Right.

31:22 The idea was that we would see interest rate cuts from the Federal Reserve, and therefore that would bring down mortgage rates and allow people, especially first-time homebuyers, to finally be able to buy that home.

31:32 And it's been so difficult because I think what was originally thought as the ceiling, that 7% rate, is now being questioned as whether it's the new floor. And as long as the war in Iran continues, oil prices trading above $ 100 a barrel, diesel at record highs, this is going to continue to be a problem.

31:48 And now, folks, on Bloomberg Money, we destroy Sarah Foster's weekend.

31:52 Let's do it with a book.

31:53 This is my autumnal read, which I just think is incredibly important on bonds, but it's a highly readable look. at the history of bonds from Venice to Amsterdam to London and over to Alexander Hamilton in America. This is a triumph by Robin Wigglesworth. A Fabulous Debt, which is a quote, I believe, from England ages ago. I just can't say enough about the readability of this. For people that want to know from the past, it reads like Daniel Yergin, The Prize, Commanding Heights, and the others.

32:25 Does it demystify the bond market?

32:26 It does, and he's beautiful about explaining Tom Keene Babel in English. Robin does a great job, and I can't say enough about it.

32:35 Mary Childs wrote a fantastic review of this book for a Bloomberg weekend. I'm curious whether they're going to turn into some kind of TV series on Netflix or something else. Because you talk about how there's like specific examples, right? What happened in Amsterdam? What happened when Alexander Hamilton was leading the treasury?

32:52 Yeah, it was. And even, you know, he brings in the play from Broadway. And so he brings everything. He even has Mary Childs in the book, I might point out.

32:59 Oh, really?

33:00 Ed Yardeni shows up early and then Sidney. Great book. And I love You've Got Gretchen as your book this week.

33:06 Yes.

33:06 All right.

33:06 You teased it. Dead is at the heart of the PE industry, which is one of the single most significant wealth generators in the past 30, 40 years. You just look at who owns all the sports teams and drives Wall Street. So my book is Gretchen Morgenson and Joshua Rosner's These Are the Plunderers, How P.E. Runs and Wrecks America.

33:23 So not subtle at all. They clearly have a point of view. But it's really about how private equity financiers use debt to fund corporate takeovers and load them up with debt while cutting costs and generate big profits for themselves and really remaking the economy in the process. And We're now seeing it.

33:38 We're now learning it.

33:39 And what I hear all the time, and this goes back to Susie Welch earlier in the program, you can't do this without reading background. And that's what the Wigglesworth and Morganson-Rosner books do. They're background to make you have a deeper thought about what we're doing in personal finance.

33:55 I meet so many young people, and Sarah, I'm sure you feel the same. You've encountered this as well, who say that they want to go into private equity. This is before they've ever worked in banking at all. They just want the straight line to private equity because that's how you build wealth. That's how you make a lot of money. That's the new investment banking in Wall Street.

34:10 It's true.

34:11 There's this new rise in young earners who I think have realized that you don't grow your wealth through your salary alone. You kind of grow your wealth through assets. And especially if you're able to kind of take a job that woos you with some of these stock options, maybe the ability to eventually work for a company that IPOs.

34:25 But they have a timeline of what? One year, two years? Where am I going to be in four years, right?

34:31 The investing schedule is difficult and it's complicated. You know, as we see, it's so much volatility in the market that it's something you definitely have to consider.

34:38 All right, Sarah Foster, really appreciate you joining us as always. Bloomberg reporter Sarah Foster with our coverage of student loans as well as mortgages. For the latest reviews and recommendations from Bloomberg, be sure to subscribe to the On Books newsletter. Tom, your book once again, The Elegant Debt.

34:56 Oh, I like that. Robin, thank you so much. Scar Butcher and the Fabulous Dead.

35:01 A Fabulous Dead.

35:01 A Fabulous Dead.

35:02 Fabulous Dead. All right. It may feel like summer. The leaves are changing. Tom had an autumnal book. Will you put gas in the tank to go see fall foliage? We're going to take a look at what people are spending their money on this weekend and in the weekends to come. This is Bloomberg Money. That's upstate New York.

35:20 I think it's Central Park.

35:22 Central Park.

35:29 The Bloomberg Money, and we say good afternoon to you. Scarlett Fu and Tom Keene with us now. Lisa Mateo, any number of things to talk about to get to this weekend and Bloomberg this weekend. But as we said with Torsten Slott, Yankees on a roll, crushed the Red Sox. No one was more happy. than Lisa Mateo. The Yankees doing well. And of course, Lisa's been garbed in the dreaded New York Yankees merch here over the years.

35:56 And oh, thank you for the Red Sox photos, guys.

35:59 Really appreciate it.

36:01 Oh, Tom, I'm so sorry.

36:02 I know you call them the dreaded Yankees.

36:03 But we have to go on because yes, the fabulous jacket that I do have of the Yankees.

36:10 Thank you to Tom Keene, who looks so happy.

36:16 There's a first game of the ALDS on Saturday, right?

36:19 On Saturday, yeah, go to Tampa.

36:20 So after they swept the boss, they swept boss, and we're moving on Saturday to Tampa Bay. And then from Saturday, you go to Monday. But then Wednesday, they bring it back home. And that's where you start looking up tickets because my husband's already asking me, can we get tickets?

36:33 Talking about personal finance.

36:35 Yes, can we get tickets Wednesday?

36:37 No.

36:37 So if you look at behind where the Yankees sit, $ 6, 000, about $ 6, 000 for one ticket.

36:45 So $ 12, 000.

36:47 That's the starting.

36:49 But then if you go all the way back to $ 200, 000, $ 300, 000 section, which is usually where we are, it's about between $ 200, 000 and $ 300, 000.

36:55 So there you go.

36:56 That feels a little more reasonable.

36:57 Yeah, $ 400, 000 range.

36:58 You can get them for $ 100, 000 and something.

36:59 But everyone's asking about the ticket.

37:01 Well, that's a nice banner. Yankees beat Red Sox.

37:03 Yes.

37:03 It still hurts. We did that special for you.

37:05 Doesn't it? Why don't we segue here to what matters in the autumnal glow?

37:10 Oh, a lot of people driving out and checking out the fall foliage.

37:13 I've already started. They started in the Poconos. You see the colors already. We've been up there, way upstate. You can start to see it too. And they have this great ferry that takes you on this whole beer trekking, you know.

37:23 Oh, I'm shocked.

37:25 Straight up the Hudson River.

37:26 It's amazing. Just in time for people to visit their kids at school, right? Visiting weekends tend to coincide with these fall foliage.

37:33 Correct, correct.

37:34 Yes, I know.

37:35 I just came back from visiting my daughter, so it was a great experience.

37:38 There's also the possibility if you happen to fly, I don't know if you know about this, United wants you to defect from Delta or American. It's the battle of the Wi-Fi. You have to think about it.

37:47 If you're going to travel, are you going to go United or are you going to go Delta? Because United has Elon Musk's Starlink and Delta does not. They have Amazon Leo.

37:54 And this is in-flight Wi-Fi service. Yes, in-flight Wi-Fi. So it's the whole back and forth.

37:59 United is trying to get Delta's customers to say, hey, you know, through October 15th, we'll take you on and we'll keep your loyalty points, too.

38:06 I mean, I know we do personal finance, but basically because of Lisa's appearance here, SpaceX.

38:11 Is spiked up today.

38:12 Yes.

38:13 Up to a 157 level. And that's Starlink, right?

38:16 That's Starling.

38:16 That's right.

38:16 That is Starling.

38:17 Yes, among many, many businesses. But, you know, everyone's points. That's personal finance.

38:21 Does your daughter bother you in class yet?

38:24 She is attempting, yes. She has a big anatomy physics test today.

38:28 Well, good luck to her. She's a little stressed out. But it's good.

38:31 It's very good. It's very good.

38:32 Lisa McHale, thank you so much. And make sure to watch Bloomberg this weekend every Saturday and Sunday morning starting at 7 a.m. Eastern time. That does it for Bloomberg Money today. Have a great day.

38:42 This is the Bloomberg Money Podcast, bringing you a smart look at the forces shaping your financial life. I'm Tom Keen with Scarlett Fu. You can watch the show live on Bloomberg TV every Friday at noon Wall Street time. Subscribe to the podcast on Apple, Spotify, or wherever you listen. And as always, on the Bloomberg Terminal and the Bloomberg Business app.

39:09 Bye.